Over 3 million people joined Medicaid last year, increasing enrollment to 46.8 million and placing additional burdens on states already struggling to deal with budget concerns. The story in the Washington Post explains that

[t]he recession has fueled the greatest influx of Americans onto Medicaid since the earliest days of the public insurance program for the poor, according to new findings that show caseloads have surged in every state.

The analysis by the Kaiser Family Foundation, a health policy and research organization, found that in three-fifths of the jurisdictions, including Maryland and the District, people rushed into the safety net for health coverage at more than twice the rate as the year before.

Like the rising demand for food stamps and welfare benefits, the increase in people turning to Medicaid reflects the millions of Americans who have lost jobs and economic self-reliance and are asking the government for basic help, in many instances for the first time.

Because the program is large and expensive, the spurt in Medicaid caseloads has produced far more damaging effects on state budgets than the other two programs. In the past year or two, many states have responded by reducing the medical services available to Medicaid patients or payments to doctors, hospitals and other providers of health care.

Now, 29 states are considering further reductions or have made them since their current fiscal year began.... Such strains exist even though the federal government has been giving states extra money for Medicaid as part of the economic stimulus efforts Congress set in motion a year ago. The extra subsidies are due to expire at the end of this year, and states are lobbying hard to continue them for at least six months.

The worsening financial burden imposed by Medicaid also has heightened some governors' wariness about the approach to redesigning the nation's health-care system that is favored by the White House and congressional Democrats. In the health-care bills passed by the House and the Senate, an expansion of health coverage to the uninsured would rely substantially on Medicaid. If the legislation were enacted, the federal government would pick up the cost for the first few years, but, after that, states would contribute a small portion.